Problem 1: Entity A incurred the following during the year in which it constructed a new facility.

1. Real estate purchased as facility site

(seller valued land at $250,000 and building

at $40,000; Entity A demolished the existing building) $290,000

2. Accrued real estate taxes (owed by seller) paid at time

of purchase of real estate 6,000

3. Cost of demolition of building to make land suitable for

construction of a new building 32,000

4. Cost of filling and grading the land 6,700

5. Excavation costs for new building 21,900

6. Architects fees for new building plans 44,000

7. Full payment to building contractor 629,500

8. Cost of parking lots, driveways, landscaping 36,000

9. Proceeds from salvage of demolished building 12,700

List the items and amounts that make up the Land account. Be sure to provide a total.

Problem 2: Equipment with a cost of $145,000 has an estimated salvage value of $20,000 and an estimated life of 8 years. Compute the annual depreciation and then show what this asset looks like on the balance sheet at the end of the second year (prepare a partial classified balance sheet).